Will the accountable care organization (ACO) be a durable part of reform?

Magic bullets come and go in the world of health policy, but the accountable care organization (ACO) is likely to be a durable reform. Except for group practices like Geisinger, Harvard Vanguard, Kaiser Permanente, systems like the VA, and local communities in which independent practitioners have established cooperative collaborations, health care has been grotesquely uncoordinated in the U.S. ACOs speak to that structural lesion.

Title III of the Patient Protection and Affordable Care Act puts ACOs forward as an innovation to promote the quality and efficiency of health care. “Efficiency” isn’t controversial. Doing a second MRI because the results from the first one aren’t available is pure waste. But not doing an MRI when a plain film, or a careful physical examination and history, could be “adequate,” is more complex. Some would call that “efficiency” or “evidence based practice.” Others would call it “rationing.” But there’s no uncertainty about how to label not offering an effective, and desired, service – that’s definitely rationing.

In the October 6 issue of JAMA, Dr. Robert Brook of RAND has an important brief article: “What if Physicians Actually Had to Control Medical Costs?” As a thought experiment, Brook imagines that enough money is available for a physician to treat 100 patients with condition A or condition B. Treating each patient costs $1000, and only $100,000 is available. Epidemiological data predicts that the physician will see 100 patients with A and 100 patients with B. The benefit of treating A is four times the benefit of treating B. What should the physician do?

Brook believes, and I agree, that even when we have wrung all efficiency savings out of health care, there will still be beneficial interventions physicians want to provide, and patients want to receive, that our society will not be prepared to pay for. He argues, and I agree, that the medical profession is unprepared for engaging with this eventuality:

Policy makers discuss controlling medical costs, and academics publish articles analyzing cost-control approaches. But physicians seem oblivious to the possibility that, sooner or later, care will need to be explicitly rationed. Physicians who actually order the health-related diagnostics or treatment for which taxpayers pay must decide how they will cope with explicit rationing. Will there be a physician plan or health professional plan to deal with the eventuality of explicit rationing? Should planning begin now instead of waiting until the decision is imminent?

There’s no way that the need for rationing could have been part of the federal health reform process. We’re not yet mature enough as a body politic to deal with that piece of reality without going ballistic about “death panels.” But wishful thinking and political immaturity don’t change the fact that rationing happens now, will have to be acknowledged in the future, and is an ethical requirement, not an abomination. Brook concludes, and I again agree:

…an explicit plan for rationing needs to be developed. But who will do it, and how?

Physicians (and other health professionals), patients and the wider public should be the “who?” And with regard to “how?,” the experience of the Didcot practice in the U.K. provides a model of deliberative process. With help from two ethicists, the general practice group created guidelines for the practice, reviewed them with members of the practice, and made them public.

No one wants to go first in discussing rationing. To do so would invite savage, know-nothing political attack. But it’s important for public deliberation about how to ration in a clinically guided, ethically justifiable and potentially socially acceptable manner to get underway. Accountable Care Organizations are an ideal setting for physicians and patients to join together in this kind of what if scenario planning.

Jim Sabin is a psychiatrist and director, ethics program, Harvard Pilgrim Health Care.  He blogs at Health Care Organizational Ethics.

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  • http://distractible.org Rob

    To me, the fatal flaw in the ACO concept is the assumption that “physician control” is the same as “hospital control.” Hospitals and physicians are on opposite sides when it comes to utilization of resources (specifically primary care physicians), in that hospitals benefit from over-utilization of resources, while physicians do not. I am all for accountable care, and think that physicians are the ones who need to make wiser decisions, but having lived in a hospital-driven world I think they are more driven to doing procedures, not eliminating them.

  • http://www.BocaConciergeDoc.com Steven Reznick MD FACP

    The Wall Street Journal of 10/26/2010 contained an editorial ” Big Insurance Big Medicine” which accurately discussed what is happening in my medical community. Insurers are consolidating and hospitals are buying up medical practices again. In my thirty one years of private practice I have seen the local hospitals buy up medical practices three times. The first two times they ran them ineffectively, lost millions of dollars, provided poor service and gave them back to the physicians they had purchased them from. I have no expectations that this time it will be any different.
    The mind game proposed in the article leaves one vital group out of the rationing equation. There are those patients out there who want a service and are willing to pay for it out of pocket. Regardless of whether the diagnostic test is the best test for them, the most cost effective or efficient, patient empowerment has put them in a position to request and or demand a particular test. In our current economic model, if government funds are not being used and the patient is paying out of pocket should they not be able to purchase the service or test if it is one of the possible diagnostic choices?

  • Cheryl

    To me the fatal flaw in this model is the idea that ‘society’ will be paying for all services. Go ahead and ration according to data what ‘society’ is paying for. Don’t limit the rest of us from getting good care by hamstringing our physicians. There are still remnants of capitalism/supply & demand left. Last I checked, physicians weren’t slaves to a ‘system’ – let’s keep it that way.

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